This action might not be possible to undo. Are you sure you want to continue?
ISSN 0090-2616/01/$–see frontmatter PII S0090-2616(01)00031-6
Fighting the War for Talent is Hazardous to Your Organization’s Health
here is this widespread idea, made popular by McKinsey & Co., Fast Company, and others, that we are in a “war for talent.” In an intellectual capital world, talent is what matters, and we are told that the companies that will win in the competitive arena are those that are the best at locating, assessing, recruiting, and keeping the most talented people. A typical statement of this position is this opening sentence from an article entitled “The Great Talent Caper” in the September, 2000 issue of Fast Company, the enormously successful business magazine for the new economy: “It’s hard to argue with the idea that the company with the best talent wins.” Actually, it’s quite easy to argue with that seemingly common-sense statement, while still granting the importance of intellectual capital and knowledge work in today’s economy. As John Chambers, CEO of Cisco Systems, has noted, great teams outperform collections of individuals— even when the individuals are more talented. Even in professional sports, the teams with the best talent, often nicely proxied by the highest salaries, don’t always (or even usually) have the best records or invariably win championships. In business and nonproﬁt organizations, characterized by interdependence among individuals so that productivity is affected not only by one individual’s skills and abilities but also by the capabilities and actions of others, individual talent mat-
ters even less in determining organizational success. As W. Edwards Deming and the quality movement pointed out a long time ago—a lesson that we clearly need to relearn—what is important is not so much individual motivation or ability but the attributes of the system in which the person works. Some organizations have systems that bring out the best in their people, while others, ﬁlled with talented, motivated, hard working people, have practices and policies that interfere with the ability of these individuals to do their best and to make a difference. For example, does anyone really think that United Airlines has less capable or talented people than Southwest Airlines, even though United has much poorer service as assessed by on-time performance, lost bags, and customer complaints? To take another case, would the long-standing and pervasive business problems of Xerox Corp., a company that has been the source of business worldchanging inventions such as the ﬁrst personal computer, word processing software, and local area networks, be solved if Xerox somehow got more talented, brighter people? It’s bad enough that ﬁghting the “war for talent” has companies ﬁghting the wrong war, often using the wrong methods. But there is an even worse problem, namely the consequences that are unleashed by even waging the talent war in the ﬁrst place. In
248 ORGANIZATIONAL DYNAMICS
and business process issues that are invariably much more important for enhancing performance. people know what they know and they know what they don’t know. creating destructive internal competition. and universities in the United States. cultural. you have the best people—an attitude that makes building a wise organization almost impossible. • And ﬁnally. SonoSite. Managing with Power. and mentoring. Considering these social psychological processes helps make the argument that not only should your company not necessarily try to win the war for talent. Dee II Professor of Organizational Behavior at the Graduate School of Business. Pfeffer has taught at the business schools at the University of California. as well as more than 100 articles and book chapters. In wise organizations. and become discouraged—in the process ensuring that the organization has way too many people who are in the process of dropping out of the competitive fray.Jeffrey Pfeffer is the Thomas D. • A tendency to glorify the talents of those outside the company and downplay the skills and abilities of insiders. Berkeley and the University of Illinois and has been a visiting professor at Harvard Business School. as the company seeks success solely through getting the right people in the door. Stanford University. given fewer resources. • A de-emphasis on ﬁxing the systemic. What happens in a war for talent? There is: • An invariable emphasis on individual performance (rewarding the individual stars). training. even adopting this image as a management metaphor can be quite hazardous to your organization’s health. The Knowing-Doing Gap: How Smart Companies Turn Knowledge Into Action and Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People. this article. including The Human Equation: Building Proﬁts by Putting People First. as well as consulting and providing executive education for numerous companies. AudibleMagic. and Connet and Company as well as on the visiting committee of the Harvard Business School. leading to a loss of motivation on the part of those inside the ﬁrm and to their turnover (thereby ensuring that the recruiting challenge will be even greater as the company tries to replace those it has inadvertently sent packing). Earlybird Venture Capital. Pfeffer serves on the board of directors of Actify. associations. I describe the various organizational processes and dynamics that are frequently unleashed when companies adopt the “war for talent” mind-set. thereby diminishing teamwork. arrogant attitude— once you have successfully competed in the war for talent. He has presented seminars in 26 countries throughout the world. He is the author or coauthor of 10 books. and retarding learning and the spread of best practices inside the company. Portola Packaging. and Unicru and on the board of advisors for MTW Corporation. • The creation of a self-fulﬁlling prophecy where those labeled as less able become less able because they are asked to do less. the development of an elitist. Companies that think they are winning the war for talent think they are so SPRING 2001 249 .
Selfinterest dictates not being very helpful or forthcoming to those with whom someone competes for those rewards. are you going to ask others for help? Not likely. Indeed. in the process costing the company billions of dollars. Another study of a multinational food producer operating in seven countries and producing the same products using the same machines found a performance difference of 112% between the best and worst performing plant. Carla O’Dell and Jackson Grayson have written a book detailing the problems of spreading better practices and knowledge inside companies. Why is it so hard to share best practices and knowledge? One of the answers must surely be the internal competition set up by the zero-sum reward systems that are part and parcel of the war for talent. a study of oil reﬁneries by the consulting ﬁrm Solomon Associates found that in a statistical analysis predicting reﬁnery performance (uptime and maintenance costs). in charge of diffusing lean manufacturing when he worked for General Motors Corp. An intensive study of an effort to make a 250 ORGANIZATIONAL DYNAMICS Hewlett–Packard Co. Let’s begin with one fact on which virtually everyone agrees—sharing best practices and knowledge inside organizations is difﬁcult and frequently not very successfully done. Seems logical. The absence of a company effect on reﬁnery performance is prima facie evidence for the absence of intraorganizational learning. was quite articulate about how the internal competition inside GM hindered plant managers’ learning from each other. Tom Lasorda. OVEREMPHASIS ON THE INDIVIDUAL. and raises parceled out only to those who excel. What this means is that there was as much variation in performance across reﬁneries within a single oil company as there was across reﬁneries owned by different companies. they do things to create a culture in which knowledge sharing is unlikely to occur. someone else will and you’ll lose them. Indeed. even if someone has the audacity to ask for help. recognition as a winner. Differentiated pay means that we want to pay the best more and the worst less. And why would you do that in a competition for salary and status—in a competition to see who has the most “talent?” Moreover. Nor is this case unique. So what are the behavioral implications of this? If you are a plant manager having problems in your performance. It only makes sense. but like much conventional wisdom. to provide these stars differentiated rewards that recognize their stardom. For instance. A study of 42 food manufacturing plants in a single company doing essentially the same task found a difference in performance of 300% between the best and worst performing plant. it ignores some important dynamics and facts. why would anyone else offer such help? Why would I help a competitor? We are competing for the zero-sum rewards of promotions. leaders who are concerned with improving internal knowledge transfer and subsequent organizational performance should try and stamp out excessive internal . Ironically. there was no effect of company on the results. The assumption is that if you don’t pay your stars inordinately well. if internal competition retards the spread of best practices across a company. Logically.full of smart people that they know everything! Let’s consider each of these processes and their consequences for the company. even as companies spend hundreds of millions of dollars on technologies to collect and distribute knowledge. because when you do.. pay for performance is a common recommendation found in the literature on attracting and retaining talent. UNDEREMPHASIS ON THE TEAM One of the assumptions of the “talent” language is that there are individual stars. then. manufacturing unit more effective also reported that opportunities to share innovative process technologies or other sources of competitive advantage were overlooked. you signal publicly to everyone in the company that you are not doing as well as they are.
but by treating its people the best. the statement that Tandem paid good. competitive salaries would be offered in return. rewarding the individual is what logically follows from the belief that is individuals who make the difference. Why? First of all. running advertisements. There are many other examples of companies that have decided excessive internal competition is getting in the way of achieving business results and have implemented management practices designed to curtail. internal rivalry. Shortly after taking over IBM Corp. If the person insisted on knowing the precise salary and negotiating over it. outside of the organization. there is little evidence that simply paying people more is the most critical factor in recruiting or particularly in retaining employees. THE GLORIFICATION OF OUTSIDERS In the search to ﬁnd the best people.. And that’s just what our research has found. Most surveys show that money is not the most important reason why people take or leave jobs. Recruiting or even looking for someone from outside requires more effort. posting jobs online. Even though the talent-war mentality has led to an emphasis on rewarding “the best” to attract and retain those people. There is lesson there for us all. in SPRING 2001 251 . there is more than a little truth to the adage that familiarity breeds contempt. Guidant Cardiovascular some time ago began providing everyone the same percentage bonus. there is the effort of searching. proﬁt. According to Peter McInnes. It certainly does not pay annual bonuses to division managers who need to cooperate rather than ﬁght over transfer prices in this integrated wood products company. there is a tendency to see those people as existing primarily.competition. a vice president at Guidant. zero-sum reward practices encouraged by virtually all those who have written about talent wars. the company does this to encourage teamwork and to encourage people to focus on business results instead of maneuvering to be on the right project or work on the right team. hiring a search ﬁrm. Although theories of ingroup favoritism suggest that people tend to like and identify more with those with whom they share a social identity. by any measure the most successful integrated forest products company. tapping social networks. the largest privately owned software company in the world—with turnover less than four percent— doesn’t win the retention game by paying the best. there is the effect of behavioral commitment. One way to justify and make sense of that extra effort is to convince oneself that the people uncovered through this effortful activity are. and reviewing resumes. Why play that game? SAS Institute. has recently done the same thing. although not exclusively. Willamette Industries. does not pay short-term performance bonuses to anyone in the company. In fact. Chris Galvin at Motorola Inc. Tandem understood something quite simple but profound: people who come for money leave for money. they would not be offered the job. In other words. Insiders are already there. Not only are such individual. such as an organizational afﬁliation. based on the division’s achieving revenue. And money is the most available of all rewards—any organization can offer it.’s smelters. The point is that the emphasis on the individual rather than the team or the company is almost an inevitable outcome of a war for talent mind set. but even if they weren’t. in some surveys money is not even in the top ten. rather than exacerbate. Initially. Lou Gerstner issued a number of edicts designed to ensure cooperation and stop internal competition that was hindering the performance of the company. coming to work and immediately available. as did John Pizzey at Alcoa Inc. outsiders have the advantages of mystery and scarcity value. If the person asked. That is why years ago Tandem Computers didn’t even tell people while they were being recruited what their precise salaries would be. and technological development goals.
and service orientation. Once the merger was completed. for whom no such comparable effort has been recently expended. and the fact that the person is a person pretty much like everyone else. Again. interesting job assignments. Edwards Deming. but another part of the story is that the acquired ﬁrm was probably not very realistically appraised in the ﬁrst place. and special training and mentoring. Fresh Choice leaders told us that the Zoopa store managers weren’t actually that great and that the acquisition had been mostly done for real estate. The turnover in the Zoopa units increased after the merger. and a tendency to derogate the individual’s abilities in this status competition can emerge. W. not just for hiring but for retaining and cultivating once inside the company. purchased Zoopa. one of the suggestions coming out of some of the war-for-talent consulting goes like this: identify the top ten and the bottom ten percent. for instance.S. Research has shown. Indeed. Or as another example. such recommendations suggest ignoring everyone else. a four-unit subsidiary of Restaurants Unlimited. In the 1980s. Ironically. one of those management practices that received so much acclaim and attention was total quality management. Zoopa people looked neither so special nor so valuable as they did when they were outsiders. that cookies are rated as tasting better if there are fewer of them on the plate. there is the mystery and allure of the outsider. fast-track opportunities. Japanese management practices were venerated by many American companies. a management technique largely developed by an American. those from the acquired organization are seen as less competent than they really are. Attracting them is invariably an uncertain process— will they come. located in Seattle. the expenditure of effort elicits a commitment response. there is the effect of scarcity. once inside the organization the person becomes a competitor for status. a publicly traded salad buffet restaurant chain headquartered in California. We saw this process in full force when Fresh Choice Inc. Second and somewhat related. We don’t see the inevitable mistakes. not organizational learning. who was ignored until the practices he advocated were 252 ORGANIZATIONAL DYNAMICS adopted by others outside the U. the individual’s foibles and faults are more readily apparent. Moreover. Finally. Moreover. WORKING IN REVERSE The war-for-talent imagery has consistently emphasized identifying the top ten percent. and much of the knowledge acquired walked out the door. Implicitly. once inside the ﬁrm. THE SELF-FULFILLING PROPHECY. we always want what we can’t or don’t have.. Once inside the organization. the efforts required to achieve that performance. in which there is tendency to justify the effort by thinking the person hired is better than those inside. Some of the reason for this is the postmerger integration process. While they were competitors. looks larger than life. but who has a reputation for being an outstanding performer.fact. The top ten percent of your people should be lavished with rewards. then comes the effort of interviewing and recruiting that person. consider the many mergers that don’t fulﬁll their expectations. the hard work. worth the effort—that they are really better than those immediately at hand. or won’t they? The relative scarcity of outsiders means that they will probably be valued more highly simply because of their comparative unavailability. Once an outside candidate has been found. As the play Romeo and Juliet illustrates. Outsiders are scarcer and less available than the insiders working for the ﬁrm. Once inside Fresh Choice. The bottom ten percent should be either removed from the organization or helped to improve. There are many examples of the process just described. . and Japanese competitors were seen as larger than life. Fresh Choice admired and even tried to copy Zoopa’s recipes. Someone who is not known as well. look and feel.
and in studies of sales force performance. A similar story holds for Kurt Warner. To presume that some people are better than others presumes that there are some reasonably stable attributes. Fewer people may also remember that Young’s career began outside of the National Football League. the dogs. Louis Rams to the Super Bowl victory in 2000. Who is going to get sent to training and given more challenging job assignments. If a person confronts low expectations. the self-fulﬁlling prophecy holds that high expectations increase performance. and you’d better get more of the ﬁrst kind and less of the second. One of the most important of these factors affecting performance is the expectation for performance. Why might such effects be observed? For some fairly straightforward reasons. First. More systematically. and where natural ability would appear to play an important role. and indeed. because he was deemed not good enough. why expend effort that will just wind up being wasted? Other things being equal. that stress can itself induce poorer performance. a vast literature on the effects of expectations on behavior. one rational (and observed) response is something called “defensive effort”—fancy ways of saying that people don’t try very hard. if you think you have a good chance at success. A third factor is that the resources you get depend on what people expect from you. baseball. there is the question of whether or not there really are two (or three) kinds of people in your company—the stars. There is. if you don’t expend as much effort. If you aren’t going to succeed anyway. such differences are not invariably related to their performance. But is this true? Some American readers will recognize the name of Steve Young. And that’s the second problem—the very labeling of people will affect their performance. as a consequence of this increased effort. Labeling only a few as stars will cause the majority to perform way below their potential. you probably won’t do as well. Students labeled as not as bright tend to get less guidance and help from teachers. where measurable changes in intelligence quotient (IQ) were observed depending on the expectations for children’s performance. in which there is relatively little interdependence.There are two problems with this course of action. Conversely. and low expectations will decrease performance. Simply put. the now-retired quarterback for the San Francisco 49ers. the quarterback who led the St. beyond some level anxiety itself interferes with performance. but that players under those managers performed better than might have been expected given their lifetime records. To the extent that expectations of failure produce anxiety. you are quite likely to try harder and. a study of professional baseball players in the early 1990s revealed that better managers were able to not only get their teams to perform better. probably do better. This effect has been found in early studies of intelligence and performance in the classroom. in fact. Most people don’t ﬁnd the prospect of failing very comforting. and that such traits are largely not amenable to being changed. failure or the prospect of failure can produce anxiety. saving their precious time for coaching and mentoring those who have a real chance of beneﬁtting. such as talent and drive. because people can perform above or below their natural level depending on a myriad of factors. and everyone else. The self-fulﬁlling prophecy is one of the oldest and most established principles for understanding organizational behavior. considered to be one of the better quarterbacks in professional football history. The point is that although there are certainly differences across people. As anyone who has ever taken a test can attest. Another reason is anxiety. It has been found in studies of performance in the Israeli defense forces. those that are labeled as stars or the others? These resource allocation choices have real consequences for perforSPRING 2001 253 . which differentiate among people. That’s why the war for talent has such an emphasis on selection and retention—there are better and worse people. And this is for a sport. Bosses are less likely to spend time with people who aren’t too good.
In this way. Its founder and chairman. such labeling will go on with a vengeance. George Zimmer. or else they will simply give up and retire in place. in other words. it is time and attention. The company’s success comes in large measure from its emphasis on training. Training enhances people’s selfesteem. has the interesting title of executive vice president for human development. including time and attention. Two consequences can result. but one that is declining. that almost guarantees the initial labels will come to be true. There are too many problems and issues competing for managers’ time and too many things to think about. and has developed wardrobe consultants who provide a service experience that permits the company to achieve outstanding proﬁt margins. in the opinion of the company. People who receive less coaching. The company aspires to help people become better than they (or probably anyone else) ever thought they could be—a difﬁcult challenge in retailing. The company operates in the difﬁcult industry of selling tailored men’s clothing. CULTURAL PROBLEMS THAT AFFECT PERFORMANCE The scarcest resource in most organizations is not money.mance. or the entire company—and it focuses on these individuals with the presumption that there are better and worse ones. Many of them had worked in the industry for years and were. even when they have put a deposit in their pockets for a few 254 ORGANIZATIONAL DYNAMICS days or ripped off a pair of socks. training. old. as the company will be consumed with ﬁguring out who is the best and who are the rest. Fighting the war for talent focuses the company on ﬁrst grading or ranking and then seeking to select and retain the best people. it would have been ﬁnished before it even began. in charge of human resources. The Men’s Wearhouse Inc. labeling people produces an allocation of resources. It is obvious that time spent on one set of issues or initiatives are time (and effort) that cannot be devoted to other things. If the company had adopted the talent-war mentality. and even third chances. Charlie Bresler. on individuals—not groups. The American automobile industry illustrates this problem quite nicely. the compound annual growth rate achieved by The Men’s Wearhouse over the past ﬁve years has been almost 30% in sales and more than 25% in earnings per share. In a company obsessed with ﬁghting the war for talent. It causes companies to ignore or downplay the importance of intervening to build cultures and systems that bring out the best in everyone. has stated that the company is in the people business. Either those labeled as less than star-like will leave. IGNORING THE SYSTEMIC. a low-wage industry that has typically not attracted the best people. has among the lowest losses because of theft in the retail industry even without electronic security. thereby giving up on most of your people (only 10% of the people can be in the top 10%)? Consider the case of The Men’s Wearhouse. Most . But that very labeling process will produce many discouraged people—those not accorded the most favorable labels. not the suit business. tired. What happens when you don’t ﬁght the war for talent. mentoring. and burnt out. teams. Training not only imparts knowledge of clothing and sales techniques. General Motors concluded that the problem with its automobile plants was its people. It focuses the company. The Men’s Wearhouse has lowered its turnover. by signaling that the organization values them and is interested in investing in them. By helping people unleash their full potential. Nonetheless. and fewer challenging job assignments will— other things being equal—learn less and be less able to perform at a higher level. in which case the company will have to recruit even more people to replace them. depriving the company of their effort and ideas. In the 1980s. and there’s not much to be done to change anyone. an industry that is not only competitive. has an interesting operating philosophy. But the company has succeeded to an astonishing degree by giving people second.
including the president of NUMMI. New United Motors Manufacturing. GM’s response was to invest in factory automation to eliminate as many of these autoworkers as possible. Many were not highly educated. the selectivity provided an opportunity for some who didn’t like or agree with the new culture to self-select out. nor did it substitute machines for employees. People who were expected to take some responsibility for the operation of the plant were given the information necessary to do so. • High pay. Layers of management were eliminated. NUMMI really excelled at giving front-line people. • Selective hiring. When Toyota assumed control of the management of NUMMI. well known for absenteeism. Even though few were actually culled during this process. put them in an adversarial relationship. Although under the terms of the UAW contract people formerly employed at the GM plant that had been closed were promised recall rights. Virtually all industrial engineers were removed from the plant. California. therefore lacking the skills to help GM compete in an increasingly quality-conscious. • An egalitarian culture. As Lincoln Electric Co. • Information sharing. At the NUMMI plant (and subsequently at Saturn which learned a lot from the experience of NUMMI). (NUMMI). technologically complex industry. In return for working cooperatively to enhance productivity. the company thought. quality. working in teams. Toyota neither tried to replace the people (85% of those who worked at NUMMI when it started production in 1985 had worked for the former GM plant. and so forth. By contrast. Toyota Motor Corp. people in the NUMMI plant were promised security and were treated as real partners in the enterprise. Rather. ate in the same place. Inc. one reason why NUMMI was able to cut its costs. to leave the company with the highest ﬁxed costs in the industry and with machines that didn’t really work the way they were supposed to. • Decentralization of decision making. Front-line people were trained in analyzing work methods and processes and were given the time and the freedom to implement productivity and quality-enhancing changes in the production process.were unionized. as described by a number of observers. and its executives recognized a long time ago. it gave those who came back into the plant a feeling that the company cared about who they were. poor quality. statistical process control. and drug abuse and alcoholism). responsibility for improving performance. Instead. and productivity was widely shared and readily available. The outcome of that process was. At that plant. information on production. and a feeling of pride for having gone through the selection process. these individuals nonetheless went through interviews and screening. The idea of selfmanaging teams was one of the organizing principles that governed the operations of the plant. when demand was slack. wore the same smock. NUMMI employees were promised that they would be laid off only under extreme conditions— the viability of the enterprise was at stake. and a number of the other Japanese automobile manufacturers took a different approach. SPRING 2001 255 . NUMMI offered the highest wage in the industry at that time. employees used the time to rehabilitate and upgrade the plant and to take courses that enhanced their skills in quality. it abolished the executive dining room and reserved parking spaces. no one will voluntarily contribute ideas for enhancing productivity if the result is that they or their colleagues will lose their jobs. the company did those things that are well known as being associated with high performance or high commitment management practices: • Established a policy of mutual commitment and employment security. More important. The deal was high pay and security in return for a new spirit of cooperation. Everyone. nicely illustrated by what happened in the Toyota-GM joint venture in Fremont. formerly operated by General Motors. who had years of experience and the wisdom and insight that comes from that experience. which.
The Toyota production system has been remarkably effective because it is a system that permits regular people to achieve world-class results on a consistent basis over long periods of time. was that all employees shared the responsibility and the obligation to make the organization successful. be it a new structure or a prototype. As already noted. The attitude of wisdom. while keeping open the idea that no one in the company or the company itself knows everything. so that it continues to learn even as it acts. acknowledged to be superior? One reason is that although other companies would like to implement ﬂexible manufacturing. and time spent ﬁghting a war for talent is time diverted from building a culture and set of management practices that permits everyone to perform as if he or she were in the top 10%. Arrogance. and then sell- . time and attention is diverted to other activities such as ﬁghting with the union. the slack permitted even more extensive training to occur. Another motto at IDEO is that enlightened trial and error outperforms the planning of ﬂawless intellects. but it was so sure of itself it delayed entering into serious negotiations. wisdom is the attitude of knowing what you know and knowing also what you don’t know. The recent books on the Microsoft Corp. The idea.and socialized with each other. important not only for product design but for organizational learning more generally. They were given training in how to analyze jobs and work processes and when there was a downturn in demand. so it needs to continue learning even as it does things. Time is indeed a scarce resource. However. may be a natural byproduct of operating in the software industry—an industry that makes a practice of announcing “vaporware” and selling prototypes into the marketplace. Having an attitude of wisdom permits an organization to take action even as it doubts what it knows. WINNING THE WAR FOR TALENT BATTLE BUT LOSING THE WAR FOR WISDOM A corollary of the war for talent imagery is that what companies want is “smart” people. It is a system of organizing that recognizes the connection between the social and the technical aspects of organization and that puts in place a culture that helps to ensure the motivation and performance of the employees. an awardwinning product design ﬁrm headquartered in Palo Alto. nicely exempliﬁes a wise organization. NUMMI expected its front-line people to contribute their ideas to making things better. so the only mistake is not to take action based on what is known at the time. As originally deﬁned by Plato. antitrust trial show that Microsoft could have reached a settlement in the trial. you see the attitude of wisdom. failing at the end. In each of these statements. represents a midpoint between ar256 ORGANIZATIONAL DYNAMICS rogance and insecurity. and that it was wrong. A third aphorism is that the company believes in failing early and failing often—which is better than failing once. This cultural norm means that people learn from doing. it shows that it is all right to act without having the complete right answer. letting customers ﬁnd the bugs. Each reﬂects having enough conﬁdence to try something. he stated that all he knew was that the new structure was the best the company could come up with at the time. and failing big. the CEO. companies may be much better served by having “wise” people. Why don’t other automobile companies copy this system. announced a reorganization a while ago. however. It is a norm that facilitates rapid prototyping. implementing complicated robotics. When David Kelley. We are surrounded by examples of companies that have gotten into trouble by being too arrogant. Not only does that statement illustrate that it is all right to make mistakes at the company. as characterized by a number of scholars. • An emphasis on training and skill development. The company’s arrogance during the trial offended the trial judge. engaging in internal politics and competing with each other. IDEO Product Development. conveyed symbolically.
and be ready and able to change as market demands and conditions change. and why. is fond of saying that he is not a technological visionary and that he can’t predict the future. There is a lot of evidence that suggests teams can outperform groups of more talented individuals. Once explained in this way. give them the software that they want and need. typically populated by people with a surfeit of ego and self-conﬁdence. To listen to your customers. Chambers and other senior managers spend most of their time with customers and employees. implicit or explicit. it listens to the market and provides the technology that the market demands. as opposed to the contempt more often seen? One of the geniuses of Toyota was recognizing that the people on the assembly line actually knew something about automobile assembly. Watch John Chambers at a conference. But the problem is not just that the warfor-talent imagery may be wrong. you need to think you don’t know everything. what SAS Institute must do is to listen to its customers. It is not a company too proud to go out and purchase the technology it needs. Cisco’s ability to not only acquire companies but retain their people is one of its important sources of success. in terms of their abilities and capabilities. which is why selecting (and keeping) the right people is so crucial. The ability to learn from others depends importantly on not thinking yourself or your organization so superior to them that you have nothing to learn. If you think about it. Hawkins wants to learn from them. It is an image that almost naturally produces a set of SPRING 2001 257 . he spends most of his time listening and asking questions. just the best listeners. that is the best way to learn. we can see that neither assumption can be accepted uncritically. regardless of formal degrees and the ability to talk smoothly. John Chambers of Cisco Systems is another person in another company that shows an attitude of wisdom. a cofounder and CEO of SAS Institute. at least by the time they are adults in the work force. One of the marks of the wisdom of Jeff Hawkins. Any theory. Indeed. and that people can perform above or below their natural abilities depending on the situation. Maybe that means not thinking that you have the smartest people. and learning is important in a rapidly changing market environment. causes us to see some things in speciﬁc ways and to ignore other things. It is a formula that has produced more than 23 consecutive years of doubledigit growth and a 98% license renewal rate. Rather. how they do it. listening. how likely are they to be willing to listen and learn? How likely are they to treat others not as “smart” as they are with respect. It would be easy for a technological guru (and billionaire) to think that those that don’t use the latest technology are not only uncool but are not too smart. Therefore. The war for talent has embedded within it a theory that holds: 1) that organizational performance is essentially the aggregation of a bunch of individual performances (which is why if you get people who do well individually you can win the competitive battle). and 2) people are essentially unchanged. including the leadership they receive and the help they get from others in their immediate environment.ing upgrades that ﬁx the problems the company shipped in the ﬁrst place (this is called versions of the product). nor is it easy. CONCLUSION Is it possible to wage the war for talent and not fall into these problems and pitfalls? Of course. What does this have to do with the “war for talent?” Just this—if you hire the best people who think (or even know) they are the best. James Goodnight. the largest privately owned software company in the world. is his interest in watching people who use paper instead of personal digital assistants so he can see what they do. The company is fond of saying it is agnostic with respect to speciﬁc technologies. But it is not likely. Cisco has no technology religion. In the world of high technology. cofounder of Handspring.
and produce an arrogant attitude that makes it hard to learn or listen. mostly from outside.management actions that cause problems. Fighting the war for talent can readily create self-fulﬁlling prophecies that leave a large portion of the work force demotivated or ready to quit. instead of ﬁxing the culture and system of management practices that research has shown are consequential for performance. and why great companies get the best out of their people instead of always searching for different people. It can cause the company to focus always on getting better people. 258 ORGANIZATIONAL DYNAMICS . It is for these reasons that ﬁghting the war for talent can indeed be hazardous to an organization’s health.
The discussion of the elements of high performance or high commitment work systems comes from The Human Equation. Mark Foulon. The self-fulﬁlling prophecy. MA: Harvard Business School Press. Discussions of organizational culture and its importance can be found in Michael L.” Industrial and Labor Relations Review (1995). The Machine That Changed the World: The Story of Lean Production (New York: Harper Perennial.SELECTED BIBLIOGRAPHY The war for talent has been described in Charles Fishman. “The War for Talent. MA: Harvard Business School Press. Chambers. Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People (Boston.” Fast Company (August. “Pygmalion in Management.. Peter Archibald. 2000). “Alternative Explanations for Self-Fulﬁlling Prophecy. 1997). Also see Carla O’Dell and C. SPRING 2001 259 . including “Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry. Sterling Livingston. 1998). and J. or the effects of expectations on behavior. Many of the examples of the importance of teamwork and of building great cultures found in this article come from Charles A.” in Research in Personnel and Human Resources Management. Dov Eden. Some good. “The War for Talent.” McKinsey Quarterly (1998). Huselid. O’Reilly III. CT: JAI Press. “Self-Fulﬁlling Prophecy as a Management Tool: Harnessing Pygmalion. Becker and Mark S. “High Performance Work Systems and Firm Performance: A Synthesis of Research and Managerial Implications. 1998). Tushman and Charles A. The Human Equation: Building Proﬁts by Putting People First (Boston. Elizabeth G. 1998) and Brian E. and Daniel Roos. Jackson Grayson. Vol. O’Reilly and Jeffrey Pfeffer.” Psychological Bulletin (1974): 74 – 84. Daniel Jones. including Pfeffer. 1998). 53–101. is a powerful and important theory often overlooked in the current emphasis on rewards and incentives. and in a forthcoming book by Michaels and his McKinsey colleaques.” Harvard Business Review (July-August.” Academy of Management Review (1984): 64 –7. Jr. classic articles on the phenomenon include. Our discussion of the Toyota production system and ﬂexible production is based on material from James Womack. Winning Through Innovation (Boston: Harvard Business School Press. 1969): 81– 89. Steven M. Research evidence on the importance of how companies manage people for organizational success is summarized in several places. If Only We Knew What We Know (New York: Free Press. 1990) and from John Paul MacDufﬁe’s research. Helen Hanﬁeld–Jones. Hankin and Edward G. 16 (Greewnwich. Michaels III. W.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.